This website is


 Welcome    Main    Forum    FAQ    Useful Links    Sample Letters   Tribunal  


The Act is here but when is the SPA?
25/04/2002 NST-PROP By Salleh Buang

The Housing Development (Control and Licensing) Act 1966 (amended last year) is ready for implementation and enforcement but where is the standard Sale and Purchase Agreement, wonders Salleh Buang

In earlier press statements by the Housing Minister, Datuk Seri Ong Ka Ting, we were told that the Housing Development (Control and Licensing) Act 1966 - (amended 1ast year) would come into force on February 1, 2002, after it is gazetted. Subsequently, we were told that the Act would come into force when the members of the Housing Tribunal have all been appointed.

Several people queried me recently whether these people have in fact been appointed. I must say that I am still not sure. If only government websites are kept up-to-date such queries need not be asked.

Be that as it may, the point is that the Act is here, ready for implementation and enforcement. One question, however, still remains. Where is the SPA (the standard sale and purchase agreement), which is currently based on either Schedule G and H of the Housing Developers (Control & Licensing) Regulations of 1989?

You cannot have one without the other, so says the words of an old evergreen melody. The same thing can be said of our housing laws. Whilst the revamped Act is now in place, future housing purchasers still need to know their expanded rights vis-a.-vis the housing developers, and they can only known them if these rights are spelt out clearly in black and white in the SPA.

If Housing Ministry figures can be accepted as correctly portraying the recent housing scenario in the country, we should not forget that last year (2001) alone, the Ministry received 1,823 complaints from house purchasers. This is a worrying upward trend from previous years - 446 complaints in 1990, increasing to 737 in 1997.

The nature of the complaints is only too well-known. They range from shoddy and defective work, to missing Certificate of Fitness (CF), late delivery, flagrant breach of the SPA, lack of amenities, and inadequate infrastructure such as access roads and drains.

If the revamped Act is fully enforced by the Controller, hopefully, we will see a downward trend in complaints in the coming years. Perhaps, by year 2005, the Ministry might actually achieve its "zero- complaint" target.

In the past, there have been cases of developers handing over vacant possession of "completed" housing units to their purchasers without having first submitted a proper application for CF to the relevant local authority. They did this in order to avoid having to pay liquidated damages for delayed completion. Under the SPA, buyers have the right to claim damages if their houses are not completed on their due dates.

Clause 21(1) of the SPA (as contained in Schedule G of the 1989 Regulations) sets out the "manner of delivery of vacant possession". It states that before a developer can hand over vacant possession of a completed house to his purchaser, four conditions must be fulfilled:

1. The Architect has issued a certificate certifying that the construction of the building has been duly completed;
2. Water and electricity supplies have been connected to the said Building; however, this has now to: be read in the light of an amendment in the law in force from August 1, 1994, which only requires the developer to ensure water and electricity supply is “ready for connection";
3. The developer "has applied for the issuance" of a CF from the appropriate authorities; and,
4. The purchaser has paid the purchase price in full to the developer.

With regard to condition three above, the average house buyer probably does not have the slightest idea whether the developer has indeed made a "proper application" for CF from the local authority.

Will the new Act improve the situation in the future? Some legal commentators think so. They refer to the several new paragraphs which have been added to the existing section 7. Under the new paragraph (h), a developer is now required to inform the Controller of Housing of the "handing over of vacant pos- session'; of the completed house, together with a certified copy of the Architect's certificate certifying that the house has been duly completed and that "water and electricity supplies are ready for connection".

Besides that, under new paragraph (i), the developer is required to inform the Controller if "the appropriate authority has refused to accept the submission of any document" relating to the issuance of CF. And under new paragraph (j), the developer is required to "exercise !ill such diligence as may be required” for the issuance of CF.

As mentioned earlier, the revamped Act has established the Housing Tribunal (its full name being the "Tribunal for Homebuyer Claims"). Purchasers who have claims (not more than RM25,000) against their developers can refer these claims to the Tribunal. They need not file their actions in court, which has been the only way for them to seek legal remedies in the past. These matters too need to be spelt out in the SPA. The Housing Ministry cannot expect the average house buyer to go searching the Act in order to know rights in this matter.

Under the revamped Act, there is also a new provision , (section SA) relating to an early termination of the SPA.

This situation arises when the developer fails to commence his housing project within six months of the date of the agreement and when at least 75 per cent of all the purchasers have decided that they do not wish to continue with the purchase.

This matter too needs to be spelt out fully in the SPA, because each and every purchaser who agrees to terminate the agreement will want to know what are his rights in respect of the money which he had paid to the developer, as well as his responsibilities if the house has been charged by him as security for a housing loan.

The revamped Act is here because Parliament has finally done its work (though not without an inordinate delay). For the SPA to see the light of day, the 1989 Regulations have to be revamped as well. That is the task of the Housing Minister alone.


Main   Forum  FAQ  Useful Links  Sample Letters  Tribunal  

National House Buyers Association (HBA)

No, 31, Level 3, Jalan Barat, Off Jalan Imbi, 55100, Kuala Lumpur, Malaysia
Tel: 03-21422225 | 012-3345 676 Fax: 03-22601803 Email:

© 2001-2009, National House Buyers Association of Malaysia. All Rights Reserved.